Regulation:

American Forest & Paper's Harman reacts to EPA boiler rules

OnPoint

Aired: Monday, February 28, 2011

How is industry responding to U.S. EPA's Clean Air Act standards for boilers and incinerators? During today's OnPoint, Donna Harman, president and CEO of the American Forest & Paper Association, discusses the new boiler regulations and calls on EPA to weaken the rules so they are more affordable and achievable for industry. Harman explains why she believes these rules are an example of regulatory overreach by the agency.

Transcript

Monica Trauzzi: Hello and welcome to OnPoint. I’m Monica Trauzzi. With me today is Donna Harman, president and CEO of the American Forest and Paper Association. Donna, thanks for coming on the show.

Donna Harman: Thank you, Monica.

Monica Trauzzi: Donna, your organization has been actively involved in the discussions leading up to EPA's Clean Air Act Standards for Boilers and Incinerators. How far do the new rules go? What are some of the specifics?

Donna Harman: Sure. Well, let me just start by saying I think EPA did make some progress in the new rules that they put forward yesterday. They're enormously complicated. It will take several days for us and other organizations like ours to really comb through, look at them with a fine tooth comb and figure out exactly what these rules do. But on our first reading and our first initial glance at the rules, we think there still are some shortcomings. The rules that were proposed last June were completely unachievable and unaffordable. We have some concerns that these rules too, might be unachievable in some specific areas. And so we'll be looking at those, the approach that they've taken. We had requested that EPA change—fundamentally change the way that they were going about this rulemaking. They chose not to do that and so now we'll need to see if the alternatives that they have taken accomplish some or a portion of what needed to be done in order to ensure jobs are front and center in the current economic climate that we have and that the rules are still protective of public health.

Monica Trauzzi: Environmental groups are saying that if the rule gets any weaker there won't be any immediate health or environmental benefits.

Donna Harman: Well, EPA certainly doesn't think that. I thought it was very telling that they proposed a rule that they say is half the cost of the rule that they originally proposed that still achieves almost the identical health benefits that they claimed from the first rule. It seems to me there is still some additional room here for changes. One of the things that I think gets lost on regulations as people are looking at regulations, policymakers in Washington, you know, some of the biggest health effects or health impacts are really whether you have a job or not. So I think we need to keep jobs in mind and I know that's not what the Environmental Protection Agency has as its primary objective, but government, as a whole, has to keep the balance between jobs and over-regulating in mind. And I think that's what you saw with the over 260 elected officials across the country, from governors to state legislators to Senators to members of the House of Representatives, that's what they told EPA. Consider the impact on jobs and the economy, especially given where we are in this current economic climate.

Monica Trauzzi: EPA had requested additional time to come out with this rule, which they weren't granted. Is sort of a rush job evident in the way that this final rule came out and what it looks like?

Donna Harman: Well, I think EPA has been working very hard and we were, of course, very disappointed that the court didn't grant EPA the additional time. We felt that a reproposal of the rule was the right way to go. That repurposing the rule would give them then the ability to take additional public comment and would give them the ability to consider the four or 5000 comments that they received on this rule last summer. And, by the way, that is a remarkable number. That's a very large number of public comments that came in from technology vendors, from hospitals, from schools, from union members, from, you know, average people out in America who could see some way that this regulation was going to affect them. So, we think, with additional time, that EPA would have been able to more fundamentally change the way they've gone about this regulation. And a good example of that is one of the requests that we had along with several others was for EPA to do this rule on a source base, which is what we thought the statute called for, rather than a pollutant-by-pollutant base. And so that's an area where, with more time, we think EPA could have delved into that a little bit deeper, could have come forward with a different approach and we'll just see what happens. As you know, they've signaled their intention to reconsider the rule and—or at least to reconsider some portions, of the rule, and we may have a request from our association and possibly from some others to reconsider additional parts of that rule.

Monica Trauzzi: Do you expect significant changes to the rule during this reconsideration process?

Donna Harman: Well, I think the reconsideration process is an opportunity for EPA to look at—to get additional public comment. That's why they're doing it, to ensure in their own minds that what they've put forward is defensible and I think, you know, they've really invited additional comments, additional information. And they've said, in some cases, that they didn't feel, like in the record, they had enough information to go in a certain direction. An example of that may be in the health-based emissions limitations alternative, which was another thing that we were disappointed that wasn't included. And so it will be incumbent upon us and others to bring forward information that justifies those type of changes. If we can do that, then I would think that EPA would be open to that and willing to listen.

Monica Trauzzi: There's been a lot of discussion in this administration about reforming regulation. Is this rule an example of regulatory overreach?

Donna Harman: Our view is yes and it has been for the last nine months or so. Since the rule was first released up on the EPA website back in April, we thought that this rule went substantially further than was needed. Our objective has always been to get a rule that's achievable and a rule that's affordable. And if the rule can be made to be achievable and affordable, then our members are perfectly willing to make the investments that are needed to accomplish that.

Monica Trauzzi: And we're still not there. We’re still not at achievable and affordable.

Donna Harman: From our perspective we’re not there. There are some areas where we feel like that some of the standards that have been set may not be achievable and certainly some of the additional controls and requirements are not affordable. And so we'll be working in this intervening timeframe with EPA and to make sure that we take full advantage of the reconsideration process to get the information to EPA that they need so they can make a different decision.

Monica Trauzzi: There are more rule makings coming down the pipeline. How do you think those will play into the Boiler MACT standards and do the Boiler MACT standards sort of highlight how EPA may handle these other regulations?

Donna Harman: That's a good question. That really brings back the issue of the regulatory overreach that you mentioned earlier. When you look at the pace and the number of the rulemakings that EPA has currently underway and what's projected and what's planned through the rest of this year, this is a pace that's unprecedented. I don't think EPA can keep up with it. I don't think businesses can keep up with it. It's difficult for just—with the sheer volume of the regulations that are coming to us, for people to look at them, to understand what they do, to assess what the costs will be, too, you know, go out and work on the engineering that's needed. Because all of these regulations tend to require capital cost improvements. They require changes in your facilities. Those changes sometimes take years to accomplish, planning, not to mention putting them into your capital cycle because they're all capital intensive, which is a really important thing for people to not lose sight of, the amount of capital dollars that are in play here. So the Boiler MACT rule, I think, has been something that because it does have such a broad application, a lot of different businesses, a lot of different industries, schools, universities, municipalities could all kind of rally around and say, wait, let's take a timeout here. This is such an expansive rule. And my guess is, is that now that some of these groups have been able to delve into this one, that they may be able to do some similar things. Look at some similar—or have some similar actions or activities on other rulemakings that are coming down the pike in the future.

Monica Trauzzi: OK. We’ll end it there. Thank you for coming on the show.

Donna Harman: You're welcome, thank you.

Monica Trauzzi: And thanks for watching. We'll see you back here tomorrow.